Guosheng Securities: BYHEALTH's profitability is expected to continue improving, and it will continue to enhance its e-commerce investment strategy

Guosheng Securities' research report points out that BYHEALTH has optimized its sales expense allocation, significantly improving its profitability. In Q2 2025, the company's revenue decline narrowed. Apart from the low base effect, it benefited from the company's strengthened user operations and improved sales conversion, as well as the accelerated introduction of new products, launching high-priced products online and enhancing the layout of mass-priced products offline. Looking ahead to the second half of the year, in H2 2024, the company's revenue will face a very low base due to pressure on consumer spending, inventory clearance of new and old major products, and intensified industry competition. In Q2-Q3 2025, new products will be launched successively, and targeted marketing resource allocation is expected. It is anticipated that in H2 2025, supported by a very low base and new products, revenue growth may turn positive, with the main brand and LSG still expected to be the main drivers of revenue growth. On the profit side, the company will continue to improve its e-commerce investment strategy, increase investment in upgraded core categories, and may increase self-broadcasting efforts in interest-based e-commerce platforms like Douyin. Expense allocation is expected to continue optimizing, contributing to profit elasticity, and profitability is expected to continue improving